Moving from the Physical to the Virtual Sales Space

In April, I attended the 8th Digital Dealer Conference and Exposition in Orlando. It’s a strong conference that’s held twice a year – once in the spring and once in the fall.

I have noticed a definite transition from five years ago when the attracted the top Internet directors. These were folks who were the early adopters. As the conference grew, I started seeing more progressive dealers attend with their Internet directors.

Dealers that attended three years ago typically represented mid-level size operations. At the latest event, I met with general managers, Internet directors and management teams from all size operations.

It’s a great way to keep your finger on the pulse of the latest ways to move from a dealership focused on physical selling to virtual selling.

This may sound easy but it takes incredible focus to move a dealership culture. The Digital Dealer conference will help your management team gain knowledge of areas like SEO, online advertising strategies, metrics, and best practices. Even if you attend the conference every six months, it is still hard work to transform a team that has always had a strong focus on physical selling.

Here are several questions for your management team to help you gauge whether your dealership is dialed in to leveraging the advantages a digital strategy offers:

How many cars were sold in the Internet office? (This should be a layup.)

How many unique visitors did you have on your website last month?

What was the conversion rate?

What was the average time on site measurement?

How many Internet leads do you have in the pipeline and what is the process for follow-up?

How many VDPs and SRPs did you get from Auto Trader and Cars.com?

Which of your pre-owned cars are priced effectively for market conditions?

What is your cost per lead (if you are paying for leads) and how high will you go before you cut off a provider?

If your management team (used car manager, new car manager, finance manager, service director and Internet director) provided all the right answers, you are an all-star. You are doing a great job of guiding your team into the age of virtual selling. If the team doesn’t have any idea of the answers, you fall into the traditional physical sales model that has existed for seventy years. Pieces of this model still need to be used, but the Internet has forced dealers to examine how they track success today.

I clearly don’t believe that this information is just for the 25-year old Internet salesperson in the back corner office. If a management team has the ability to track customer count, closing ratios, gross average count, RO count, etc., this should be an easy transition.

To better understand what strong dealers are doing to help with this educational process, I visited with Shaun Kniffin, director of Internet Sales and eBusiness Development of Germain, and Catherine Martinez, executive director of e-Commerce of Morse Operations. These are two of the best and brightest minds in the country. Shaun was a presenter this year at the Digital Dealer Conference and Catherine has been involved with best practice sessions at the conference in the past. Both have been featured on the cover of Digital Dealer magazine.

Shaun was coming off a great month with all of the Germain dealerships in Columbus. He gave some of the credit specifically to vAuto. Germain has been focusing on driving more Internet leads by using new vendors to help with areas like video solutions. Germain has also been working on stronger controls with phone call tracking and operational efficiencies.

From two years ago, Germain has doubled its Internet spend. Those dollars came primarily from the newspaper and radio — 33%-50% of all advertising dollars are focused on Internet related initiatives. Even with the traditional media, the emphasis is to drive traffic to Germain.com through promotion of current brand specials and the aggregated inventory. As Shaun put it, “It’s all about the Internet.”

The group has evolved the last five years from an Internet salesperson, to an Internet store to an Internet group. This required support from the senior management level and like any key focus, action plans were tied to profit plans. Germain tracks all necessary data to support their spending decisions and to optimize the results through accountability and awareness. Shaun loves that he can trace everything when the Internet is involved, including the impact of traditional media to drive the visitors count. New initiatives include mobile, more video, online reputation, cross pollination of social media with customer feedback and streamlined delivery processes.

The Ed Morse Group also just completed two tremendous months. Catherine Martinez believes that it was a domino effect led by consumer confidence leading to increased spending which boosted the confidence of dealership employees. Catherine also gave credit to the manufacturers adding life to lease programs.

The Ed Morse group reduced its advertising spend from five years ago, as a result of the down economy. However, the group is generating the same traffic while spending less money because of its digital advertising strategy which has helped to expand its reach and visibility.

The specific advertising focus varies from dealership to dealership depending on the individual needs that particular month. The core focus overall is decreasing the ad spend while moving to a higher percentage of the total dollars invested with online initiatives.

The management team has become comfortable running ad source reports and trusting the CRM to show the actual results by ad source.

One example was the Bayview Cadillac store in Ft. Lauderdale. The dealership moved from a weekly full page ad to a half page ad and then to a quarter-page add every other week. There was not a drop in showroom traffic or calls. For the past two months, this same dealership has cut all TV and cable, again without a drop in activity.

It is still running a few UC liners, however the call tracking was only showing six total calls for the month when I talked to Catherine. She is not in favor of cutting 100% of traditional advertising but she has identified a pattern. The money is now being spent on additional SEM, online videos, specific spotlight ads with Trader (if pre-owned is a focus that month) and social media (Facebook, Twitter). The percentage of dollars being invested in the Internet varies per dealership, from 17% to a high of 44%.

I asked how much of Catherine’s focus was on the Internet. Her response was,”100%” followed by a comment that even the “old school GM’s” have been forced to make the Internet part of their daily thought pattern. Catherine believes that she is getting help to transform her team by having a senior executive team firmly behind her for a number of years, along with the consistent message from the OEM’s to get involved with the Internet and the fact that most products being offered at NADA/Digital Dealer are e-Commerce based. It is hard to ignore the multiple messages stating the same thing.

Catherine believes that her role is to do the research and keep current on what’s new and effective. Determining which products make sense and presenting them to the group is a key part of her focus related to ongoing improvement. To support the dealerships, the Ed Morse Group has in-house CRM and Internet sales trainers available 24/7. This also insures that corporate policies are being followed daily. The group also converted the Internet sales departments to Internet Sales BDCs (not a traditional BDC). This change from 1 ½ years ago has led to increased floor traffic from online shoppers, boosted sales personnel moral and increased both sales and CSI.

According to Catherine, this transition helped to create one team working towards the same goal rather than the Internet and floor working against each other. Some online tools implemented by Catherine’s team include online call tracking, reporting and recording, online inventory analysis tools, CarFax, a focus to make the web site more robust and interactive with the use of products such as video and their CRM tool from ADP (a priority). The mission of the entire e-Commerce team is daily dedication to nothing but the virtual success of Ed Morse.

She is currently working out the kinks of the recent DMS and CRM conversion, switching all dealer web sites over to ADP, perfecting the use of video on the web sites and updating the CRM/Internet sales training manuals, which were written in house.

If you look at the impact that both Shaun Kniffin and Catherine Martinez have had on their teams, they have taken their groups from the physical to the virtual sales space.

It is apparent that they both have passion and a desire to give their teams the best possible support. They also had support from the top to sign agreements and spend money.

Unless a GM was promoted from a director’s spot, it is impossible for them to keep up with everything listed in this article. So if your team failed the test listed above, hire a person and give them permission to make an impact. Let that person report during the weekly manager’s meetings on the status of what they are doing. If you are a dealer or GM, learn the basics yourself and don’t reject an idea because you simply don’t understand it.